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Japan Sinks, Koizumi Soars
October 31, 2001
Summary
The Bank of Japan recently revised fiscal-year growth expectations from 0.8 percent to -1.2 percent. For Japan to achieve even that, its economy needs to perform far better in the next six months than it did in the last. But rather than focus on the economy, Prime Minister Junichiro Koizumi is using the issue of remilitarization to distract the public following the Sept. 11 attacks on the United States.
Analysis
The Japanese government revealed Oct. 30 that unemployment jumped from 5.0 percent to a record high of 5.3 percent in September, its sharpest one-month gain in 34 years. The rise highlights Japan's spreading economic cancer and the government's impotence in mitigating, much less treating, the problem.
Yet despite the situation, Japanese Prime Minister Junichiro Koizumi is successfully using the events of Sept. 11, which are driving the economy from recession to depression, to bolster his own popularity. Koizumi's policy of delaying economic measures while focusing on the country's remilitarization will continue. And although Japan's neighbors will become even more distrustful of its intentions, Koizumi will only be boosted higher.
Heizo Takenaka, minister for economic and fiscal policy, also this week confirmed the Bank of Japan's previous call that the economy wouldn't see positive growth for at least two years. The bank now forecasts the economy will shrink 1.2 percent instead of growing 0.8 percent in the April 2001-to-March 2002 fiscal year.
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Dan
Japan Sinks, Koizumi Soars . . .